The tide may be turning on the rent control debate as another influential think tank has come out against them.

In a lengthy analysis, the Institute of Fiscal Studies (IFS) says most controls ead to a significant decline in property quality, because landlords cut spending  on renovation and maintenance.

It argues that in a well-functioning and competitive housing market, a cap on rents would lower rents for some tenants – but produce unintended consequences. 

It says: “Market rents adjust to ensure that the rental properties available to let by landlords are the same as the rental properties tenants want, given the price. 

“If rents were capped below that market level, demand would exceed supply: there would be more households looking to rent properties than landlords willing and able to provide them. 

“Some families would find it harder to secure a rental property that suits their needs. 

“Landlords may respond by finding other ways to cover their costs or by allowing the quality of the property to decline.”

It also points out that rent controls can be complex with exemptions for some properties – like new builds – or only apply within tenancies while allowing landlords to increase rents between tenancies. 

The IFS continues: “These exemptions are intended to alleviate some of the adverse effects of rent controls on housing supply. 

“But where these exemptions have been used, rent controls have sometimes led to some landlords charging higher rents than they otherwise would have.”

In addition, in place of raising rents the institute says some landlords raise revenue through other means.

It cites a Norwegian example where a significant number of adverts for rental properties required the tenant to provide extra services such as babysitting or to provide deposits up to 10 or even 20 times the monthly rent.

“Such requirements all but disappeared following the removal of rent control” the IFS notes.

You can see the IFS paper on the subject here: https://ifs.org.uk/articles/do-rent-controls-work